We all know SMEs constitute one of the pillars of the Indian economy. However, it is also a fact that financial distress rate amongst the SMEs is alarming and this is despite the Government doing its best to help SMEs in every possible manner. Such SMEs can now hope to come out of such difficult phase courtesy IBC 2016.. Being an ex-banker, I am aware about the ground level realities and will be able to pin point the reasons for distress as also the solutions needed. However—at the same time—I must caution against blind reliance on the material provided through this website because each SME will have a unique set of problems and an in depth—and separate– study is needed to diagnose the problem. Lastly this is an educational website and no income of any sort is being contemplated.

Around 55 road accidents occur every hour, India leads in the number of deaths due to accident with around 5 lakh accidents in 2016as per the report by Ministry of Road Transport and Highways. With an increase in the number of accidents, it has become crucial now, more than ever to have an insurance cover that takes care of you and your dependents against fatalities due to accident.

It is important to have a standalone personal accident cover, over and above other insurances like life and health.

A life insurancepolicy ensures your family’s financial goals are met with in your absence and health insurance takes care of healthcare requirements of you and your family. A Personal Accident cover acts as a safety net for you in case of an unfortunate accident that may lead to loss of income which is not covered in either of the two.

It compensates for death due to accident or arising out of injury from accident within 365 days of the incident, permanent partial disability like loss of limb, arm or any of the body part, permanent total disability where the insured is unable to carry out his/her livelihood earning or is in a vegetative state or paralysed are covered.This policy also provides benefits like allowance towards the cost of children’s education and additional allowance towards a maximum of 30 days of hospitalisation.

For instance, Vijay an IT Professional the only earning member of the family met with an unfortunate accident. As a result, he lost an arm and had to undergo a surgery. His disability was partial but permanent in nature and it took months for him to recover from it.

He lost his income during this distressful period and was unable to provide for his family. Vijay had a life and health insurance policy to cover him for unforeseen situation. As a software professional, he was unable to operate with one arm, a personal accident policy would have taken care of lifestyle modifications Vijay would have had to make, thanks to benefit payable under permanent total disability cover under most personal accident policies.

Vijay’s health insurance policy took care of hospitalisation bills for the injury, but there was no compensation for loss of income during the months he was under recovery. His life insurance policy didn’t trigger as it comes to effect in case of total permanent disability or death.

A personal accident (PA) cover is one of the most affordable forms of insurance that one can have. For instance, the premium for a personal accident policy of a sum insured of Rs 10 lakh would be less than Rs 5 a day.Looking at the bigger picture, this would be the best Rs 5 anyone could possibly spend on a daily basis. The government realising the importance of this cover has included Personal Accident cover in Pradhan Mantri Suraksha Bima Yojana (PMSBY) to reach out to masses. By paying a premium of Rs 12 per annum, the government provides Rs 2 lakh for accidental death cover and Rs 1 lakh for total disability cover under this scheme.

Lifestyle choices

While a traditional PA policy provides cover against death, permanent total disability, permanent partial disability, temporary disabilities; with new age risks surfacing this financial instrument has evolved today to cover such risks arising due to the changing lifestyle choices of Indian consumers.

Earlier, adventure sports or related activities were excluded from the purview of PA cover. Today, a cover is available against risks a person is exposed to while participating in adventure sports. Apart from that, it also offers services like air and road ambulance, EMI or loan payments as well as fracture care. The policy can cover entire family under a single contract with multiple cover options for each member.

With the rise in adventure tourism, the tourism department of India also emphasises on a Personal Accident Cover while opting for adventure sports activities. Their guidelines state that a person should ideally opt for basic adventure policy which comprises of accidental protection or coverage for death and disabilities, accidental hospitalisation and basic medical evacuation, be it in the air, on land, in water, on ice or in the mountains.

Insurance companies are now moving out of the ‘one size fits all’ approach and are offering tailor-made products to address the evolving needs of the customers.

All covers under such policy have a separate sum insured, giving the freedom to the insured to design a package by picking the right coverage at the right time even midway during the policy period if the need arises. Accidents can wipe out your savings towards future goals and set you back by many years leaving you in monetary disarray.

Moreover, you are unable to live your life to your fullest by fearing the financial consequences that may arise due to such accidents. Hence, it is a necessity to have a personal accident cover that helps you pursue your passions without any fear and be secure.

(The writer is Head Health Administration Team at Bajaj Allianz General Insurance Co. Ltd)